Consultation outcome

Appendix 1 - contract completion date

Updated 11 November 2020

For insertion in contract report guidance after paragraph 3.30 on page 14

1.1 Contractors are required to report the contract completion date of each qualifying contract and of associated sub-contracts. The circumstances in which contract completion dates are required to be reported are set out in Table 1.

Table 1 – Contract completion date in contract reports

Regulation	Report	Requirement
22(2)(i)	All	Each contract report must contain the contract completion date (or, if that date is not known, the expected contract completion date).
25(2)(l)(vii)	CNR	The contractor must report the contract completion date (or, if that is not known, the expected contract completion date) of sub-contracts valued at £1 million or more.
26(6)(k)(vii)	QCR	The contractor must report the contract completion date (or, if that is not known, the expected contract completion date) of sub-contracts valued at £1 million or more.
27(5)(e)(vii)	ICR (contract value < £50 million)	The contractor must report the contract completion date (or, if that is not known, the expected contract completion date) of sub-contracts valued at £1 million or more.
28(2)(p)(vii)	CCR	The contractor must report the contract completion date (or, if that is not known, the expected contract completion date) of sub-contracts valued at £1 million or more.

1.2 Regulation 4(1) provides that the “contract completion date”, in relation to a contract, means:

a. the date described in the contract as the contract completion date; or

b. if no such date is described in the contract, the date on which the contractor completes all obligations which entitle it to final payment under the contract; or

c. if the contract is terminated before the date described in sub-paragraph 1(a) or (b) (as the case may be), the date on which the contract is terminated.

1.3 Determination of the contract completion date is, firstly, by application of regulation 4(1)(a). The contractor will need to determine whether the contract completion date has been described in the contract. If not, then regulation 4(1)(b) applies and the contractor will need to determine the contract completion date by reference to when all obligations, which entitle it to final payment from the contracting authority, are complete. If the contract is terminated, then regulation 4(1)(c) will apply to determine the contract completion date. The first two approaches in regulations 4(1)(a) or (b) are mutually exclusive, so if one of them applies, the other will not.

Date described in the contract

1.4 If the contract contains a date which is described as the contract completion date, then that date is the contract completion date. The following examples show how a contract completion date of 31 December 2026 may be sufficiently described in a contract to satisfy the definition:

• The contract completion date is 31 December 2026; or
• Completion of the contract shall be 31 December 2026; or
• The parties agree that the date for completion of the contract is 31/12/2016.

1.5 The key requirement for describing the contract completion date in the contract in a way that satisfies regulation 4(1)(a) is that the description used clearly and unambiguously indicates both the date and that it is the contract completion date. A reference merely to the date on which the main contract deliverable is to be provided may be insufficient.

1.6 If a contract completion date is described in the contract, there will be no need to apply regulation 4(1)(b) (the date on which all obligations are completed entitling the contractor to final payment). The parties to the contract may change the contract completion date by amending the contract. Paragraphs 1.18 – 1.21 identify how the contractor should deal with reporting a new contract completion date.

Completion of all obligations entitling the contractor to final payment

1.7 Where the contract does not describe the contract completion date in line with regulation 4(1)(a), and assuming the contract has not been terminated, the contract completion date is determined by regulation 4(1)(b). The contract completion date will be the date that all obligations which entitle the contractor to final payment have been completed.

1.8 If a contractor submits a contract report prior to the contract completion date, it will have to anticipate or predict the date on which it will complete the obligations that entitle it to final payment. The contractor should exercise its best judgment in making this prediction, considering all relevant circumstances, such as:

• the terms of the contract;
• performance to date;
• information provided by the MOD; and
• any material events and circumstances.

1.9 The contractor’s expectation of when it will complete all obligations entitling it to final payment under the contract may change as the contract progresses. There are many reasons why this may be the case, including changed requirements, unexpected circumstances and poor performance. Paragraphs 1.18 – 1.21 identify how the contractor should deal with reporting a new contract completion date.

1.10 There are payments that should not be considered when determining the contract completion date under regulation 4(1)(b). First, regulation 4(2) provides that the following payments are not final payments:

• any payment relating to the effect of specified indices or rates (regulation 10(5) or (10));
• any TCIF adjustment; any payment under regulation 16 (final price adjustment); and
• any amount which is determined by the SSRO to be payable.

1.11 Secondly, a contract may contain accrued obligations which continue beyond when obligations which attract final payment have completed. Foreseeably, these will include:

• an obligation to keep relevant records (regulation 20);
• an obligation to co-operate with the contracting authority in respect of requests under the Freedom of Information Act 2000; and
• an obligation in respect to the payment of damages under a warranty.

1.12 Unless obligations attract a payment under the contract from the contracting authority, they should not be considered when determining the contract completion date under regulation 4(1)(b).

Termination of the contract

1.13 A contract may be terminated in advance of the expected contract completion date. If that occurs, then regulation 4(1)(c) provides that the contract completion date will be the date on which the contract is terminated.

1.14 Determining the date of termination of a contract will depend upon the mechanism by which the contract is terminated and how it is exercised. For example, if a contract is terminated by exercising a contractual right to do so on giving 30 days’ notice, the date on which the contract is terminated may be stated in the notice of termination. Issues may arise in determining whether a contract has been terminated and, if so, the date on which termination takes effect, for example:

• whether notice has been given in the required manner and form, if any;
• correct identification of the date on which notice takes effect; and
• correct determination of when any notice period expires.

1.15 The contract may specify circumstances which give rise to termination and the requirements for doing so. There may also be relevant provision in statute and common law. The contractor should consider taking legal advice to ensure the contract completion date is correctly identified for the purposes of reporting.

1.16 A contract completion date is likely to be determined under regulation 4(1)(c) (termination of the contract) after a contract completion date has already been reported in earlier contract reports. Paragraphs 1.18 – 1.21 identify how the contractor should deal with reporting a new contract completion date.

Contract completion dates in different contracting arrangements

1.17 The contract completion date is determined on a contract-by-contract basis, and not by reference to other contracts which may be linked or subject to it. For example, a QDC may contain a date which is described as the contract completion date. This would be the contract completion date of the QDC in accordance with regulation 4(1)(a). A QSC, which is let under that QDC, may have a contract completion date which is determined under regulation 4(1)(b). In that situation the contract completion date of the QSC may fall before, on, or even after the contract completion date of the QDC. A similar situation could arise in respect of a QDC which is a framework agreement. Contracts let under a framework agreement may have contract completion dates which fall before, on, or after the contract completion date of the framework agreement, but they will not change the contract completion date of the framework agreement.

Changes to the contract completion date

1.18 The contract completion date may change in the following circumstances:

• The contract completion date is described in the contract and the parties amend the contract to change the described date.
• The contractor’s prediction of when it will complete all obligations entitling it to final payment under the contract changes due to some change in circumstances.
• The contract is terminated in advance of the expected contract completion date.

1.19 The contract completion date is used to establish the due dates of the CCR and CCS. It is also the date following which no further ICRs or QCRs are required. Table 2 summarises the effect of the contract completion date on other reporting requirements.

Table 2 – Reporting dates established or qualified by the contract completion date

Regulation	Report	Requirement
26(1)	QCR	QCRs must be provided in respect of contracts with a value of £50m or more for each calendar quarter until the contract completion date.
27(2)(a)(ii) and 27(3)(a)(ii)	ICR	Where the parties agree the dates on which ICRs are to be submitted, those dates must fall before the contract completion date.
28(1)	CCR	A contractor is required to provide a CCR within six months after the contract completion date.
29(1)	CCS	A contractor is required to provide a CCS within twelve months after the contract completion date.
30(1) and 30(3)	On-demand reports	The Secretary of State may require by written direction a contractor to provide a CCS for specified periods, each such period ending on a date before the contract completion date. The Secretary of State may require by written direction a contractor to provide a CPS, CRP, ICR and CCS, each such direction being made before the contract completion date.

1.20 If the contract completion date changes, the contractor must report the correct contract completion date in subsequent contract reports. There will not always be a subsequent QCR or ICR in which such a change can be reported. In part, this will depend on the timing of the change in the contract completion date. It is also relevant that contracts valued below £50 million do not require QCRs and that ICRs may be infrequent, subject to any agreement reached by the parties as to when ICRs will be required.

1.21 DefCARS will calculate the due dates of reports based on the contract completion date that the contractor has reported in the Contract Reporting Plan (CRP). A changed contract completion date in a QCR or ICR will not update the CRP. If the contract completion date reported in the CRP is no longer accurate, the contractor should consider updating the CRP, otherwise the contractor may receive compliance queries and system prompts for submission of the reports in Table 2. The MOD may direct the submission of an on-demand CRP, to ensure the updated contract completion date and changed reporting requirements are recorded, or the contractor may agree to provide an on-demand CRP without written direction (Regulation 24(2)(c)). DefCARS enables a contractor to submit an additional CRP by selecting On-Demand Report when seeking to add a CIR. Section 9 of this guidance deals with the submission of on-demand reports.